Monday 23rd January 2017

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Posts tagged ‘nickel’

Updated: Financing, permitting, 12-fold expansion bring King’s Bay closer to Labrador copper-cobalt exploration

January 17th, 2017

by Greg Klein | January 15, 2017

Update: On January 17, King’s Bay announced the expansion of its Lynx Lake property from about 2,000 hectares to approximately 24,000 hectares “to adequately cover the geological structures and geophysical signatures of interest.”

 

With a provincial permit in hand and a $938,752 private placement that closed earlier this month, King’s Bay Gold TSXV:KBG readies for airborne EM over its Lynx Lake copper-cobalt project in south-central Labrador. The survey will precede a proposed first-ever drill program for the property.

Financing, permitting bring King’s Bay closer to Labrador copper-cobalt exploration

Previous work began after construction of the Trans-Labrador Highway in 2008, which unlocked some of the region’s geology. Grab samples from a quarry on the property’s east side showed non-43-101 results up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver. Other non-43-101 grab sample results from a west-side quarry ranged up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

Preliminary evidence of strong conductors in the area came from the province’s regional low-res magnetic surveys and a hand-held EM-16 device.

With highway and powerlines running adjacent to the property, Lynx Lake can be reached by a 1.5-hour drive from the town of Happy Valley-Goose Bay.

Cobalt, one of the energy metals essential to battery manufacture, presents especially troubling supply concerns due to the instability and human rights infractions of the metal’s largest producer, the Democratic Republic of Congo. See an infographic about cobalt’s precarious supply chain.

Cobalt: A precarious supply chain

January 14th, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist

Cobalt: A precarious supply chain

 

How does your mobile phone last for 12 hours on just one charge? It’s the power of cobalt, along with several other energy metals, that keeps your lithium-ion battery running.

The only problem? Getting the metal from the source to your electronics is not an easy feat, and this makes for an extremely precarious supply chain for manufacturers.

This infographic comes to us from LiCo Energy Metals TSXV:LIC and it focuses on where this important ingredient of green technology originates from, and the supply risks associated with its main sources.

What is cobalt?

Cobalt is a transition metal found between iron and nickel on the periodic table. It has a high melting point (1493° C) and retains its strength to a high temperature.

Similar to iron or nickel, cobalt is ferromagnetic. It can retain its magnetic properties to 1100° C, a higher temperature than any other material. Ferromagnetism is the strongest type of magnetism: it’s the only one that typically creates forces strong enough to be felt and is responsible for the magnets encountered in everyday life.

These unique properties make the metal perfect for two specialized high-tech purposes: superalloys and battery cathodes.

Superalloys

High-performance alloys drive 18% of cobalt demand. The metal’s ability to withstand intense temperatures and conditions makes it perfect for use in:

  • Turbine blades

  • Jet engines

  • Gas turbines

  • Prosthetics

  • Permanent magnets

Lithium-ion batteries

Batteries drive 49% of demand—and most of this comes from cobalt’s use in lithium-ion battery cathodes:

Type of lithium-ion cathode Cobalt in cathode Spec. energy (Wh/kg)
LFP 0% 120
LMO 0% 140
NMC 15% 200
LCO 55% 200
NCA 10% 245

The three most powerful cathode formulations for li-ion batteries all need cobalt. As a result, the metal is indispensable in many of today’s battery-powered devices:

  • Mobile phones (LCO)

  • Tesla Model S (NCA)

  • Tesla Powerwall (NMC)

  • Chevy Volt (NMC/LMO)

The Tesla Powerwall 2 uses approximately seven kilograms and a Tesla Model S (90 kWh) uses approximately 22.5 kilos of the energy metal.

The cobalt supply chain

Cobalt production has gone almost straight up to meet demand, more than doubling since the early 2000s.

But while the metal is desired, getting it is the hard part.

1. No native cobalt has ever been found.

There are four widely distributed ores that exist but almost no cobalt is mined from them as a primary source.

2. Most cobalt production is mined as a byproduct.

Mine source % cobalt production
Nickel (byproduct) 60%
Copper (byproduct) 38%
Cobalt (primary) 2%

This means it is hard to expand production when more is needed.

3. Most production occurs in the Democratic Republic of Congo, a country with elevated supply risks.

Country Tonnes %
Total 122,701 100.0%
United States 524 0.4%
China 1,417 1.2%
DRC 67,975 55.4%
Rest of World 52,785 43.0%

(Source: CRU, estimated production for 2017, tonnes)

The future of cobalt supply

Companies like Tesla and Panasonic need reliable sources of the metal and right now there aren’t many failsafes.

The United States hasn’t mined cobalt in significant volumes since 1971 and the USGS reports that the U.S. only has 301 tonnes of the metal stored in stockpiles.

The reality is that the DRC produces about half of all cobalt and it also holds approximately 47% of all global reserves.

Why is this a concern for end-users?

1. The DRC is one of the poorest, most corrupt and most coercive countries on the planet.

It ranks:

  • 151st out of 159 countries in the Human Freedom Index

  • 176th out of 188 countries on the Human Development Index

  • 178th out of 184 countries in terms of GDP per capita ($455)

  • 148th out of 169 countries in the Corruption Perceptions Index

2. The DRC has had more deaths from war since WWII than any other country on the planet.
Recent wars in the DRC:

  • First Congo War (1996-1997)—An invasion by Rwanda that overthrew the Mobutu regime.

  • Second Congo War (1998-2003)—The bloodiest conflict in world history since WWII, with 5.4 million deaths.

3. Human rights in mining

The DRC government estimates that 20% of all cobalt production in the country comes from artisanal miners—independent workers who dig holes and mine ore without sophisticated mines or machinery.

There are at least 100,000 artisanal cobalt miners in the DRC and UNICEF estimates that up to 40,000 children could be in the trade. Children can be as young as seven years old and they can work up to 12 hours with physically demanding work earning $2 per day.

Meanwhile, Amnesty International alleges that Apple, Samsung and Sony fail to do basic checks in making sure the metal in their supply chains did not come from child labour.

Most major companies have vowed that any such practices will not be tolerated in their supply chains.

Other sources

Where will tomorrow’s supply come from and will the role of the DRC eventually diminish? Will Tesla achieve its goal of a North American supply chain for its key metal inputs?

Mining exploration companies are already looking at regions like Ontario, Idaho, British Columbia and the Northwest Territories to find tomorrow’s deposits.

Ontario: Ontario is one of the only places in the world where cobalt-primary mines have existed. This camp is near the aptly named town of Cobalt, which is located halfway between Sudbury, the world’s nickel capital, and Val-d’Or, one of the most famous gold camps in the world.

Idaho: Idaho is known as the Gem State while also being known for its silver camps in Coeur d’Alene—but it has also been a cobalt producer in the past.

B.C.: The mountains of B.C. are known for their rich gold, silver, copper, zinc and met coal deposits. But cobalt often occurs with copper and some mines in B.C. have produced cobalt in the past.

Northwest Territories: Cobalt can also be found up north, as the NWT becomes a more interesting mineral destination for companies. One hundred and sixty kilometres from Yellowknife, a gold-cobalt-bismuth-copper deposit is being developed.

Posted with permission of Visual Capitalist.

A 2016 retrospect

December 20th, 2016

Was it the comeback year for commodities—or just a tease?

by Greg Klein

Some say optimism was evident early in the year, as the trade shows and investor conferences began. Certainly as 2016 progressed, so did much of the market. Commodities, some of them anyway, picked up. In a lot of cases, so did valuations. The crystal ball of the industry’s predictionariat often seemed to shine a rosier tint. It must have been the first time in years that people actually stopped saying, “I think we’ve hit bottom.”

But it would have been a full-out bull market if every commodity emulated lithium.

By February Benchmark Mineral Intelligence reported the chemical’s greatest-ever price jump as both hydroxide and carbonate surpassed $10,000 a tonne, a 47% increase for the latter’s 2015 average. The Macquarie Group later cautioned that the Big Four of Albermarle NYSE:ALB, FMC Corp NYSE:FMC, SQM NYSE:SQM and Talison Lithium had been mining significantly below capacity and would ramp up production to protect market share.

Was this the comeback year for commodities—or just a tease?

That they did, as new supply was about to come online from sources like Galaxy Resources’ Mount Cattlin mine in Western Australia, which began commissioning in November. The following month Orocobre TSX:ORL announced plans to double output from its Salar de Olaroz project in Argentina. Even Bolivia sent a token 9.3 tonnes to China, suggesting the mining world’s outlaw finally intends to develop its lithium deposits, estimated to be the world’s largest at 22% of global potential.

Disagreeing with naysayers like Macquarie and tracking at least 12 Li-ion megafactories being planned, built or expanded to gigawatt-hour capacity by 2020, Benchmark in December predicted further price increases for 2017.

Obviously there was no keeping the juniors out of this. Whether or not it’s a bubble destined to burst, explorers snapped up prospects, issuing news releases at an almost frantic flow that peaked in mid-summer. Acquisitions and early-stage activity often focused on the western U.S., South America’s Lithium Triangle and several Canadian locations too.

In Quebec’s James Bay region, Whabouchi was subject of a feasibility update released in April. Calling the development project “one of the richest spodumene hard rock lithium deposits in the world, both in volume and grade,” Nemaska Lithium TSX:NMX plans to ship samples from its mine and plant in Q2 2017.

A much more despairing topic was cobalt, considered by some observers to be the energy metal to watch. At press time instability menaced the Democratic Republic of Congo, which produces an estimated 60% of global output. Far overshadowing supply-side concerns, however, was the threat of a humanitarian crisis triggered by president Joseph Kabila’s refusal to step down at the end of his mandate on December 20.

Was this the comeback year for commodities—or just a tease?

But the overall buoyant market mood had a practical basis in base metals, led by zinc. In June prices bounced back from the six-year lows of late last year to become “by far the best-performing LME metal,” according to Reuters. Two months later a UBS spokesperson told the news agency refiners were becoming “panicky.”

Mine closures in the face of increasing demand for galvanized steel and, later in the year, post-U.S. election expectations of massive infrastructure programs, pushed prices 80% above the previous year. They then fell closer to 70%, but remained well within levels unprecedented over the last five years. By mid-December one steelmaker told the Wall Street Journal to expect “a demand explosion.”

Lead lagged, but just for the first half of 2016. Spot prices had sunk to about 74 cents a pound in early June, when the H2 ascension began. Reaching an early December peak of about $1.08, the highest since 2013, the metal then slipped beneath the dollar mark.

Copper lay at or near five-year lows until November, when a Trump-credited surge sent the red metal over 60% higher, to about $2.54 a pound. Some industry observers doubted it would last. But columnist Andy Home dated the rally to October, when the Donald was expected to lose. Home attributed copper’s rise to automated trading: “Think the copper market equivalent of Skynet, the artificial intelligence network that takes over the world in the Terminator films.” While other markets have experienced the same phenomenon, he maintained, it’s probably the first, but not the last time for a base metal.

Was this the comeback year for commodities—or just a tease?

Nickel’s spot price started the year around a piddling $3.70 a pound. But by early December it rose to nearly $5.25. That still compared poorly with 2014 levels well above $9 and almost $10 in 2011. Nickel’s year was characterized by Indonesia’s ban on exports of unprocessed metals and widespread mine suspensions in the Philippines, up to then the world’s biggest supplier of nickel ore.

More controversial for other reasons, Philippine president Rodrigo Duterte began ordering suspensions shortly after his June election. His environmental secretary Regina Lopez then exhorted miners to surpass the world’s highest environmental standards, “better than Canada, better than Australia. We must be better and I know it can be done.”

Uranium continued to present humanity with a dual benefit—a carbon-free fuel for emerging middle classes and a cautionary example for those who would predict the future. Still oblivious to optimistic forecasts, the recalcitrant metal scraped a post-Fukushima low of $18 in December before creeping to $20.25 on the 19th. The stuff fetched around $72 a pound just before the 2011 tsunami and hit $136 in 2007.

American election fosters forecasting frenzy

November 11th, 2016

by Greg Klein | November 11, 2016

An anti-establishment crusader, a dangerous extremist or a sensible person given to outrageous bombast, that new U.S. president-elect has some mining and metals observers in as much of a tizzy as the official commentariat.

Soon after the election result was announced, the World Gold Council cheered as their object of affection passed $1,300, “compared with $1,275 an ounce before the vote counting began.

U.S. election fosters forecasting frenzy

“We are seeing increasingly fractious politics across the advanced economies and this trend, combined with uncertainty over the aftermath of years of unconventional monetary policies measures, will firmly underpin investment demand for gold in the coming years,” the WGC maintained.

Two days later gold plunged to a five-month low, “hit by a broad selloff in commodities as well as surging bond yields on speculation a splurge of U.S. infrastructure spending could stoke inflation.” At least that was Reuters’ explanation.

GoldSeek presented a range of comments, with Brien Lundin predicting a short rally for gold. GATA’s Chris Powell suggested the metal’s status quo would prevail. “Trump won’t be giving instructions to the Fed and Treasury until January, if he even has any idea by then of the market rigging the government does.”

About a day after that comment, Reuters noted that Trump’s team had been courting big banking bigshot Jamie Dimon of JPMorgan Chase & Co for Treasury secretary.

Powell added that a post-election “great grab for physical gold” might overpower “the paper market antics of the central bank. But geopolitical turmoil hasn’t done much for gold in recent decades and I’d be surprised if that changed any time soon.”

A pre-existing rally pushed copper past $6,000 a tonne on November 11, which Bloomberg (posted in the Globe and Mail) attributed to “Chinese speculators and bets that Donald Trump will pour money into U.S. infrastructure.”

Initial effects of Trump’s 10-year, $10-trillion campaign promise are “unlikely to kick in until the third quarter of 2017 and would in our view have the largest effect on steel, zinc and nickel demand,” Goldman analyst Max Layton told the Financial Times.

The FT also quoted Commerzbank cautioning that “metal prices still appear to be supported by the euphoria exhibited by market participants in the wake of Trump’s election victory, a reaction we find somewhat inexplicable.”

Industrial Minerals called a copper bubble.

Some sources consulted by the journal wondered whether the “pragmatic businessman” would carry out his threatened restrictions to free trade. As for Trump’s climate scepticism and opposition to green energy subsidies, Chris Berry told IM the economic case alone will sustain vehicle electrification and the resulting demand for lithium, cobalt and graphite.

Looking at a more sumptuous form of carbon, Martin Rapaport declared, “The diamond and jewelry trade will benefit as the new policies create a more prosperous middle class and greater numbers of wealthy consumers. Global uncertainty will also increase demand for investment diamonds as a store of wealth.”

But the outsider’s victory might have shocked Rapaport into ambiguity. While saying the election “sets the stage for growth and development,” a preamble to his November 9 press release called the result “positively dangerous.”

Not to be left out of the forecasting frenzy, ResourceClips.com predicts the Yukon tourist industry will add Frederick Trump, the Donald’s bordello-owning granddad, to its romanticized cast of colourful Klondike characters.

Ontario backs deep-mining research with $2.5-million grant

November 2nd, 2016

by Greg Klein | November 2, 2016

Sudbury’s status as a global capital of mining R&D gained additional recognition with a $2.5-million provincial grant. Announced at the Mining Innovation Summit on November 1, the money goes to the non-profit Centre for Excellence in Mining Innovation and its Ultra Deep Mining Network.

Ontario backs deep-mining research with $2.5-million grant

The UDMN works to improve safety, efficiency and sustainability of operations at depths below 2.5 kilometres. While China has announced support for deep-mining research as part of its Three Deep program, the alarming accident rate at South African mines has been attributed partly to the unprecedented depths of some operations, one breaching the four-kilometre mark.

Ontario hosts two of the world’s 10 deepest mines, according to Mining-Technology.com. Vale’s Creighton nickel-copper mine in Sudbury holds tenth place, at about 2.5 kilometres’ depth. Glencore’s Kidd copper-zinc mine in the Timmins region holds eighth place at slightly more than three kilometres. The other eight mines are all South African gold operations.

Another type of research goes on at Creighton, which hosts the SNOLAB physics experiments including the Sudbury Neutrino Observatory that won Art McDonald a Nobel Prize in 2015.

Why Creighton? As quantum physicist Damian Pope told the National Post, the lab’s two kilometres of rock shields neutrinos from other sub-atomic particles, allowing them to be studied in relative isolation. That research, conducted where the sun don’t shine, somehow helped eggheads understand how the sun shines.

As for mining research, Sudbury hosts nine institutes dedicated to innovation, the province stated. Ontario now has 42 operating mines supporting 26,000 direct jobs and 50,000 additional jobs associated with mining and processing, according to a statement from mines minister Michael Gravelle. He valued Ontario’s 2015 mineral production at $10.8 billion.

The Ministry of Northern Development and Mines hosted the two-day Sudbury summit to bring together “government, industry, academia, thought leaders, entrepreneurs, as well as research and innovation organizations” to further encourage mining innovation.

Read about Laurentian University’s Metal Earth project.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

October 28th, 2016

by Greg Klein | October 28, 2016

An intriguing chance find has King’s Bay Gold TSXV:KBG hoping the Trans-Labrador Highway will be a road to discovery. That’s the story behind the company’s October 27 announcement of a definitive agreement to acquire the Lynx Lake copper-cobalt property in south-central Labrador.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

Powerlines and the Trans-Labrador Highway
run adjacent to the Lynx Lake copper-cobalt property.

As Newfoundland was building the highway in 2008, a provincial contractor with prospecting experience noticed evidence of disseminated and massive sulphides, King’s Bay geologist/director Nick Rodway explains. Some geological sleuthing eventually drew the contractor to the property’s east side, where a quarry had been blasted for aggregate.

Grab samples assayed the following year showed non-43-101 results up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver. Regional low-res magnetic surveys undertaken by the province and preliminary work in 2014 with a hand-held EM-16 device suggest strong conductors underlying the area.

Grab samples taken on the property’s west side in 2015 brought non-43-101 results up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

With a team returning to Lynx Lake next week, King’s Bay intends to conduct a sampling program to bring 43-101 results, along with further EM-16 surveys. Should all go to plan, airborne geophysics could follow this winter.

Open to year-round work, highway-accessible and with adjacent powerlines, the 20-square-kilometre property sits about 100 kilometres southeast of the town of Happy Valley-Goose Bay.

Subject to approvals, the acquisition costs King’s Bay $100,000 over three years and 900,000 shares over two years. On October 27 the company also announced a private placement of up to $1 million.

The news comes amid growing concerns over future cobalt supply. Nearly 60% of global production comes from the Democratic Republic of Congo, a country rife with political instability and conflict mining.

At the same time increased demand comes from “the energy storage revolution,” reports Benchmark Mineral Intelligence. Its data shows “2015 total global supply at 100,000 tpa, of this the battery market consumed 48,000 tpa.

“With a lithium-ion battery production surge well underway—and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from three- to 35-GWh capacity—lithium-ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.”

Battery infographic series Part 4: The critical ingredients needed to fuel the battery boom

October 27th, 2016

by Jeff Desjardins | posted with permission of Visual Capitalist | October 27, 2016

The Battery Series will present five infographics exploring what investors need to know about modern battery technology, including raw material supply, demand and future applications.

 

The critical ingredients needed to fuel the battery boom

 

We’ve already looked at the evolution of battery technology and how lithium-ion technology will dominate battery market share over the coming years. Part 4 of the Battery Series breaks down the raw materials that will be needed for this battery boom.

Batteries are more powerful and reliable than ever and costs have come down dramatically over the years. As a result, the market for electric vehicles is expected to explode to 20 million plug-in EV sales per year by 2030.

To power these vehicles, millions of new battery packs will need to be built. The lithium-ion battery market is expected to grow at a 21.7% rate annually in terms of the actual energy capacity required. It was 15.9 GWh in 2015, but will be a whopping 93.1 GWh by 2024.

Dissecting the lithium-ion

While there are many exciting battery technologies out there, we will focus on the innards of lithium-ion batteries as they are expected to make up the vast majority of the total rechargeable battery market for the near future.

Each lithium-ion cell contains three major parts:

1. Anode (natural or synthetic graphite)

2. Electrolyte (lithium salts)

3. Cathode (differing formulations)

While the anode and electrolytes are pretty straightforward as far as lithium-ion technology goes, it is the cathode where most developments are being made.

Lithium isn’t the only metal that goes into the cathode—other metals like cobalt, manganese, aluminum and nickel are also used in different formulations. Here’s four cathode chemistries, the metal proportions (excluding lithium) and an example of what they are used for:

 

Cathode Type Chemistry Metals needed Example Use
NCA LiNiCoAlO2 80% Nickel, 15% Cobalt, 5% Aluminum Tesla Model S
LCO LiCoO2 100% Cobalt Apple iPhone
LMO LiMn2O4 100% Manganese Nissan Leaf
NMC LiNiMnCoO2 Nickel 33.3%, Manganese 33.3%, Cobalt 33.3% Tesla Powerwall

 

While manganese and aluminum are important for lithium-ion cathodes, they are also cheaper metals with giant markets. This makes them fairly easy to procure for battery manufacturers. Lithium, graphite and cobalt are all much smaller and less-established markets—and each has supply concerns that remain unanswered:

    South America: The countries in the Lithium Triangle host a whopping 75% of the world’s lithium resources—Argentina, Chile and Bolivia.

    China: 65% of flake graphite is mined in China. With poor environmental and labour practices, China’s graphite industry has been under particular scrutiny and some mines have even been shut down.

    Indonesia: Price swings of nickel can impact battery makers. In 2014, Indonesia banned exports of nickel, which caused the price to soar nearly 50%.

    Democratic Republic of Congo: 65% of all cobalt production comes from the DRC, a country that is extremely politically unstable with deeply rooted corruption.

    North America: Companies such as Tesla have stated that they want to source 100% of raw materials sustainably and ethically from North America. The problem? Only nickel sees significant supply come from the continent.

Cobalt hasn’t been mined in the United States for 40 years and the country produced zero tonnes of graphite in 2015. There is one lithium operation near the Tesla Gigafactory 1 but it only produces 1,000 tonnes of lithium hydroxide per year. That’s not nearly enough to fuel a battery boom of this size.

To meet its goal of a 100% North American raw materials supply chain, Tesla needs new resources to be discovered and extracted from the U.S., Canada or Mexico.

Raw material demand

While all sorts of supply questions exist for these energy metals, the demand situation is much more straightforward. Consumers are demanding more batteries and each battery is made up of raw materials like cobalt, graphite and lithium.

Cobalt:

Today about 40% of cobalt is used to make rechargeable batteries. By 2019, it’s expected that 55% of total cobalt demand will go to the cause. In fact, many analysts see an upcoming bull market in cobalt.

In many ways, the cobalt industry has the most fragile supply structure of all battery raw materials.—Andrew Miller,
Benchmark Mineral Intelligence

    Battery demand is rising fast

    Production is being cut from the Congo

    A supply deficit is starting to emerge

Graphite:

There are 54 kilograms of graphite in every battery anode of a Tesla Model S (85 kWh). Benchmark Mineral Intelligence forecasts that the battery anode market for graphite (natural and synthetic) will at least triple in size from 80,000 tonnes in 2015 to at least 250,000 tonnes by the end of 2020.

Lithium:

Goldman Sachs estimates that a Tesla Model S with a 70-kWh battery uses 63 kilograms of lithium carbonate equivalent (LCE)—more than the amount of lithium in 10,000 cell phones. Further, for every 1% increase in battery electric vehicle market penetration, there is an increase in lithium demand by around 70,000 tonnes LCE per year.

Lithium prices have recently spiked but they may begin sliding in 2019 if more supply comes online.

The future of battery tech

Sourcing the raw materials for lithium-ion batteries will be critical for our energy mix. But the future is also bright for many other battery technologies that could help in solving our most pressing energy issues.

Part 5 of the Battery Series will look at the newest technologies in the battery sector.

See Part 1, Part 2 and Part 3 of the battery infographic series.

Posted with permission of Visual Capitalist.

Nickel One Resources moves closer to PGE-copper-nickel acquisition in Finland

October 19th, 2016

by Greg Klein | October 19, 2016

Nickel One Resources moves closer to Finnish PGE-copper-nickel acquisition

Over $10 million in previous work has given Lantinen Koillismaa
resource estimates for two potential open pits.

Nickel One Resources’ (TSXV:NNN) Finland entry took another step forward with a binding letter agreement announced October 19. Already holding the Tyko project in western Ontario, Nickel One would get a 100% interest in Finore Mining’s (CSE:FIN) Lantinen Koillismaa platinum group element-copper-nickel project in north-central Finland. An LOI was announced in August.

The property would come through the purchase of Finore subsidiary Nortec Minerals Oy in a deal costing five million shares and 2.5 million warrants exercisable at $0.12 for two years. Nickel One has paid $50,000, which would be applied to a private placement of up to $100,000 into Finore following due diligence.

Benefiting from over $10 million in previous work, LK has 2013 resource estimates for two potential open pits.

The Kaukua deposit shows:

  • indicated: 10.4 million tonnes averaging 0.73 g/t palladium, 0.26 g/t platinum, 0.08 g/t gold, 0.15% copper, 0.1% nickel and 65 g/t cobalt

  • inferred: 13.2 million tonnes averaging 0.63 g/t palladium, 0.22 g/t platinum, 0.06 g/t gold, 0.15% copper, 0.1% nickel and 55 g/t cobalt

The Haukiaho deposit has three zones totalling:

  • inferred: 23.2 million tonnes averaging 0.31 g/t palladium, 0.12 g/t platinum, 0.1 g/t gold, 0.21% copper, 0.14% nickel and 61 g/t cobalt

The acquisition would bring Nickel One into “a mining-friendly jurisdiction with some of the best infrastructure in the world,” commented president Vance Loeber. The project also provides “a foothold in Finland from which we will be taking a hard look at other opportunities to continue to build a strong portfolio of projects,” he added.

Read more about Nickel One Resources and the Lantinen Koillismaa acquisition.

Pushing the boundaries

October 12th, 2016

Technology opens new mining frontiers, sometimes challenging human endurance

by Greg Klein

This is the second of a two-part feature. See Part 1.

“Deep underground, deep sky and deep sea” comprise the lofty goals of Three Deep, a five-year program announced last month by China’s Ministry of Land and Resources. Part 1 of this feature looked at the country’s ambitions to take mineral exploration deeper than ever on land, at sea and into the heavens, and also outlined other countries’ space programs related to mineral exploration. Part 2 delves into undersea mining as well as some of the world’s deepest mines.

Looking to the ocean depths, undersea mining has had tangible success. De Beers has been scooping up alluvial diamonds off southwestern Africa for decades, although at shallow depths. Through NamDeb, a 50/50 JV with Namibia, a fleet of six boats mines the world’s largest-known placer diamond deposit, about 20 kilometres offshore and 150 metres deep.

Technology opens new mining frontiers, sometimes pushing human endurance

Workers at AngloGold Ashanti’s Mponeng operation
must withstand the heat of deep underground mining.

Diamond Fields International TSXV:DFI hopes to return to its offshore Namibian claims, where the company extracted alluvial stones between 2005 and 2008. The company also holds a 50.1% interest in Atlantis II, a zinc-copper-silver deposit contained in Red Sea sediments. That project’s now on hold pending a dispute with the Saudi Arabian JV partner.

With deeper, more technologically advanced ambitions, Nautilus Minerals TSX:NUS holds a mining licence for its 85%-held Solwara 1 project in Papua New Guinea waters. A seafloor massive sulphide deposit at an average depth of 1,550 metres, its grades explain the company’s motivation. The project has a 2012 resource using a 2.6% copper-equivalent cutoff, with the Solwara 1 and 1 North areas showing:

  • indicated: 1.03 million tonnes averaging 7.2% copper, 5 g/t gold, 23 g/t silver and 0.4% zinc

  • inferred: 1.54 million tonnes averaging 8.1% copper, 6.4 g/t gold, 34 g/t silver and 0.9% zinc

Using the same cutoff, the Solwara 12 zone shows:

  • inferred: 2.3 million tonnes averaging 7.3% copper, 3.6 g/t gold, 56 g/t silver and 3.6% zinc
Technology opens new mining frontiers, sometimes pushing human endurance

This Nautilus diagram illustrates
the proposed Solwara operation.

A company video shows how Nautilus had hoped to operate “the world’s first commercial high-grade seafloor copper-gold mine” beginning in 2018 using existing technology from land-based mining and offshore oil and gas. Now, should financial restructuring succeed, Nautilus says it could begin deployment and testing by the end of Q1 2019.

Last May Nautilus released a resource update for the Clarion-Clipperton Fracture Zone in the central Pacific waters of Tonga.

Another deep-sea hopeful, Ocean Minerals last month received approval from the Cook Islands to explore a 12,000-square-kilometre seabed expanse for rare earths in sediments.

A pioneer in undersea exploration, Japan’s getting ready for the next step, according to Bloomberg. A consortium including Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metal will begin pilot mining in Chinese-contested waters off Okinawa next April, the news agency stated. “Japan has confirmed the deposit has about 7.4 million tons of ore,” Bloomberg added, without specifying what kind of ore.

Scientists are analyzing data from the central Indian Ocean where nodules show signs of copper, nickel and manganese, the Times of India reported in January. The country has a remotely operated vehicle capable of an unusually deep 6,000 metres and is working on undersea mining technology.

In August the World Nuclear News stated Russia is considering a nuclear-powered submarine to explore northern seas for mineral deposits. A government report said the sub’s R&D could put the project on par with the country’s space industry, the WNN added.

If one project alone could justify China’s undersea ambitions, it might be a 470.47-ton gold deposit announced last November. Lying at 2,000 metres’ depth off northern China, the bounty was delineated by 1,000 workers and 120 kilometres of drilling from 67 sea platforms over three years, the People’s Daily reported. Laizhou Rehi Mining hopes to extract the stuff, according to China Daily.

China’s deep underground ambitions might bring innovation to exploration but have been long preceded by actual mining in South Africa—although not without problems, as the country’s deplorable safety record shows. Greater depths bring greater threats from rockfalls and mini-earthquakes.

At 3.9 kilometres’ depth AngloGold Ashanti’s (NYSE:AU) Mponeng holds status as the world’s deepest mine. Five other mines within 50 kilometres of Johannesburg work from at least three kilometres’ depth, where “rock temperatures can reach 60 degrees Celsius, enough to fry an egg,” according to a Bloomberg article posted by Mineweb.com.

In his 2013 book Gold: The Race for the World’s Most Seductive Metal, Matthew Hart recounts a visit to Mponeng, where he’s told a “seismic event” shakes the mine 600 times a month.

Sometimes the quakes cause rockbursts, when rock explodes into a mining cavity and mows men down with a deadly spray of jagged rock. Sometimes a tremor causes a “fall of ground”—the term for a collapse. Some of the rockbursts had been so powerful that other countries, detecting the seismic signature, had suspected South Africa of testing a nuclear bomb.

AngloGold subjects job-seekers to a heat-endurance test, Hart explains.

In a special chamber, applicants perform step exercises while technicians monitor them. The test chamber is kept at a “wet” temperature of eighty-two degrees. The high humidity makes it feel like ninety-six. “We are trying to force the body’s thermoregulatory system to kick in,” said Zahan Eloff, an occupational health physician. “If your body cools itself efficiently, you are safe to go underground for a fourteen-day trial, and if that goes well, cleared to work.”

Clearly there’s more than technological challenges to mining the deeps.

By the way, credit for the world’s deepest drilling goes to Russia, which spent 24 years sinking the Kola Superdeep Bore Hole to 12,261 metres, halfway to the mantle. Work was halted by temperatures of 180 degrees Celsius.

This is the second of a two-part feature. See Part 1.

Visual Capitalist: How precious metals streaming works

September 12th, 2016

by Jeff Desjardins | posted with permission of Visual Capitalist | September 12, 2016

Miners seeking new capital have always had a variety of options: They could issue new shares, take out a loan, enter into joint-venture agreements or divest non-core assets.

However, in the last decade, a new option has emerged called “precious metals streaming”—in which streaming companies essentially offer capital up front to mining companies in exchange for metal later. If properly executed, the result is a win for both parties that can ultimately provide value to investors.

Precious metals streaming

This infographic from Silver Wheaton TSX:SLW explains the precious metals streaming model and the arbitrage opportunity that creates value for both the streamer and the miner seeking to acquire capital:

How precious metals streaming works

 

The aforementioned arbitrage opportunity in precious metals streaming is key.

For a traditional base metal miner, the majority of forecasted mine revenue may come from a metal like copper or nickel. However, along with those “target” metals, smaller amounts of gold and silver may be produced from the deposit as well.

Investors would still value those byproduct precious metals in a base metal miner’s portfolio, but the metals may be typically valued at an even higher multiple in a precious metal streamer’s portfolio. This allows the base metal miner to transfer these future “streams” to the streamer in exchange for up-front capital, which can be a win-win scenario for both parties.

Streaming benefits

In other words, miners use streaming to acquire non-dilutive financing and to extract value from non-core assets. This allows them to deploy capital on purposes more central to their strategy. Major miners such as Teck Resources TSX:TCK.A and TCK.B, Barrick Gold TSX:ABX, Vale NYSE:VALE and Glencore all sold streams in 2015.

Meanwhile, streaming companies have been very successful since this model was first pioneered 12 years ago. They are getting gold and silver at a discount, and this has created significant value for investors over the last decade. Today there are many valuable streaming companies out there, including the major ones such as Silver Wheaton, Royal Gold and Franco-Nevada TSX:FNV.

Posted with permission of Visual Capitalist.